Problem 3: Bowie bonds were first issued in 1997 when the singer and songwriter David Bowie partnered with Prudential Insurance Company and raised $55 million by promising investors income generated by his back catalog of 25 albums. This is one of the first example of an Asset Backed Security (ABS) backed by intellectual property (that is, by David Bowie's royalties).1 1. Suppose that the singer Taylor Swift considers a similar deal. Specifically, she plans to obtain $50ml. in exchange for a fixed monthly payment that comes from her royalties over the future 10 years. What is the lowest amount of yearly royalties needed to meet the fixed payment to investors that require a 3% annual return on their investment, and get the first payment 2 months after the issuance date? 2. The rapper Drake generated $22ml. in royalties in 2019. Suppose that such royalties will decline by 12% each year. Calculate the present value of this stream of cash flows when the required rate of returns for investors is 4%